Until yesterday, the saying that vegetarians are actually bad hunters brought a smile to the face. Today, it is not so funny anymore. The demand for vegetarian and vegan cuisine worldwide has taken serious hold, and this is directly reflected in both supply and demand in the HoReCa channel as well as in the consumer goods market, i.e., the FMCG sector. Products that mimic meat have become one of the leading trends in nutrition. In the latest edition of the Food Report for 2023, which analyzes global food trends, author Hanni Rützler focused on the latest trends that all stakeholders in the HoReCa chain should consider: manufacturers, distributors, retailers, and caterers. All three major and rapidly growing trends share the same denominator, which is sustainability.
The first mentioned by Rützler is ‘new glocal‘ (new glocal), a shift in global food trade towards regional agricultural cultures, shorter and more transparent supply chains, and a focus on domestic markets. As the second trend, Rützler highlights vegetarian recipes, traditional dishes reinterpreted as vegan, and the products used in that process. The popularity of plant-based food has been growing for the third consecutive year. For instance, Néstle reports a 13.8 percent increase in the sales of plant-based products in Croatia, which aligns with the broader trend in the EU, where this category records an annual growth of 14 percent, they emphasize at Néstle. The Food Report also mentions a third trend – regenerative agriculture, or food that comes from sustainable agricultural methods focused on biodiversity and soil regeneration. Regarding the supply chain, global trends are moving towards local sourcing, not so much to help small businesses survive but to reduce the carbon footprint in global transport, which carries various exotic, branded ingredients for restaurants and hotels.
In the trends of 2023, global specialized portals increasingly mention the growing role of artificial intelligence in the hospitality industry, primarily as a source of information about where, what, and for how much money one can eat. Additionally, AI has proven useful in detecting guest behavior, their habits, ordering patterns, etc.
Less Carbohydrates
The HoReCa business in Croatia is continuously growing (excluding pandemic years), not only due to the growth of tourism but also due to changes in the lifestyle habits of Croatians, who visit restaurants much more frequently and order food from them via digital applications, which has opened up a completely different sales channel. And not just dishes like barbecue and pizza, which were once most commonly consumed via delivery, but finer and more renowned restaurants have also joined the game. Generally, the menu offerings are increasingly moving towards internationalization and fusion cuisine, combining ingredients, recipes, and cooking methods from various parts of the world. For example, in Zagreb, and increasingly in the rest of Croatia, there is an explosion of Asian cuisine, which has entered serious mainstream. Unfortunately, in most cases, the offerings are in the hands of caterers who have never stepped foot on the Asian continent, so they are generally below average.
– Basic things are skipped, from preparation to serving, and the average end customer in Croatia (who travels little) thinks it should be that way. In Zagreb, we have a large offer of sushi-dishes, which are promoted as a symbol of Japanese cuisine, and few know that in Japan, where I have been twice, only one in ten restaurants offers sushi. However, Asian cuisine will increasingly develop in Croatia in the future, especially since imported workers from Asia will notice their opportunity and will take a piece of the pie from other caterers – comments Marin Medak, owner of the Rougemarin restaurant.
A good example is the first real Thai restaurant, Thai Asia, which opened two years ago in the metropolis.
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TOP 3 in 2023. The most important market directions:
1. New glocal: global food trade will become much more sustainable.
2. Vegan recipes: classic dishes are getting a new vegan interpretation.
3. Regenerative food: sustainable food does not always have to be organic.
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He also reflected on food trends in the HoReCa channel, emphasizing that vegetarian cuisine is the future, it is about healthy eating, but on the condition that seasonal fruits and vegetables are used, not various extracts, preservatives, or substitute products. And ‘plant meat’ and how to replace it is a dominant global theme, and that market is skyrocketing. Not only with meat, various creative ways of alternative cell cultures that could replace fish and dairy products are being devised. The Food Report mentions the use of algae and insects as well as microbial fermentation.
Medak believes that extracted protein to make meat is unnecessary. That, as good and desirable as vegetarian nutrition is on one side, popular veganism is a poor choice on the other, and it should only be consumed by professionals well-versed in nutritional rules.
– Veganism is entering the mainstream, and I can’t wait for that trend to end. Food that has the strongest marketing is usually the worst – adds Medak.
In his restaurant, there has been a visible trend of reduced carbohydrate consumption among guests over the past five years.
Zoran Šimunić, owner of the production company Naše klasje, whose most famous product is Aurelia pasta, explains whether the global trends we mentioned have been accepted in the B2B sector.
– We see with our customers in the western part of Europe that trends containing new adjectives (sustainable, green, ethical) are taken very seriously. We have started detailed negotiations with potential partners in Switzerland, and I can say that everything we have invested in green production so far has had weight in negotiations. They already expect you to care about the environment – notes Šimunić.
Signals from the West
Naše klasje can boast in the adjective ‘sustainable’ that it does not use freon in production, uses biodegradable detergents for cleaning, recycles packaging, and plans to become a zero waste company that completely converts organic waste into compost starting next year. This summer, Naše klasje is setting up a solar power plant, so it will obtain 50 percent of its energy from its own sources. However, unlike export partners in the West, in Croatia, he says, none of the business customers has set this as a condition or requirement.
– Unlike the wider public and consumers who react very well to every socially responsible step we take, this is currently not important in the B2B channel. In it, we are even perceived as producers of bio-products. However, I believe that trends will continue to go in that direction because everything that happens in the West comes to us as well. If healthy and sustainable products are important to customers, they will become important to companies – believes Šimunić.
Most of Naše klasje’s products are marketed to retailers, who may not care whether production is sustainable, but there is a noticeable trend of an increasing number of shelves with healthy and vegan products, which means that there is demand for them.
Priority Freshness
For years, semi-prepared and semi-finished products for restaurants and hotels have been taking an increasing share in HoReCa, and the more labor shortages there are, the larger their share becomes. Metro Hrvatska and Podravka dominate the offerings specialized for professional kitchens.
According to Tomislav Smolčec, Executive Director of Operations and Member of the Management Board of Metro, the company covers about 30 percent of the needs of the HoReCa market in Croatia, and in recent years, the largest increase in demand has been in the segment of fresh products.
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14 percent annual growth in the sales of plant-based products in the European Union
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Among caterers and hoteliers, there is a growing demand for frozen and fresh products as well as ready-to-use products. In communication with them, we have determined that the reasons for this are time savings, but also an increase in labor shortages. Thanks to technological advances in the processing, packaging, and vacuuming of food, we are talking about high-quality fresh and frozen products that meet the standards of the most demanding caterers and their guests. Metro follows these trends, so in the offer of its private labels, we provide numerous products in practical and customized packaging of top quality that enable differentiation of our customers’ offerings with increased efficiency in their preparation – states Smolčec.
Through the initiative Created for the Croatian Menu, Metro connects caterers who demand freshness and high-quality ingredients with local suppliers who guarantee it.
Thus, in the HoReCa channel, the trend is moving towards reducing once-standard dry and powdered products, such as instant soups, while the share of fresh products is increasing. Until now, Dukat and Ralu have dominated the distribution market in the ‘cold chain’, but, as Šimunić says, recently many smaller distributors have appeared in Croatia who have equipped themselves with ‘cold regime’, have specialized warehouses and delivery vehicles, and in this way enable HoReCa to make changes towards fresh ingredients.
Added Value
That quality nutrition and generally products with added value have been growing in the world and with us in recent years is also noted at Franck, where they launched a line of functional teas enriched with vitamins and minerals back in 2019, which consumers have well accepted.
– The importance of sustainability and responsible relations towards the environment and natural resources is also reflected in the Rainforest Alliance certification, which we have for our premium espresso Superiore, and in that direction, we continue to work on innovations and the development of new products for both sales channels. Guests today are becoming more and more selective, seeking top quality, and they are willing to pay for it. This is confirmed by the fact that since 2019, our premium brands such as Superiore, Stretta, and Franck 125 Years Edition have exceeded economy brands in realization. The same goes for teas, where we have the Superiore line. For everything, we have prescribed standards that we further transfer to the catering staff through a program led by a team of Franck’s professional baristas for about 15 years, maintaining regular presentations and individually tailored educational workshops for catering staff – lists Jurica Iviček, Head of HoReCa Sales at Franck.
He adds that the perception of quality depends on the final product, a cup of espresso, but also other beverages served in the catering establishment, and behind that stands a large system that must function perfectly.
– Along with a well-structured route to market, there is also complete equipment that includes quality grinders and machines, as well as effective preventive and intervention service support 24 hours a day – explains Iviček.
Sanja Krog, Head of the Food Category for the Professional Channel at Néstle in Southeast Europe, notes that with the emergence of the COVID-19 pandemic, the HoReCa channel began to adapt to the situation and change.
– Restaurants have optimized their menus, offering a narrower selection of dishes, making better use of ingredients, especially in line with the seasons. There are fewer waiters and head chefs, there is a high rotation of employees and seasonal fluctuations, and having permanent employees is becoming very challenging, which directly affects the consistency of dishes. Therefore, restaurants are looking for concepts that allow them to maintain stable quality, regardless of whether the dish is prepared by a more or less experienced chef. Consumers are paying more attention to the selection of ingredients and how what they eat is good for their immunity and physical condition. At the same time, we are faced with climate change that we feel and see every day, which is why consumers are more aware that by choosing food every day, we also influence sustainability and the situation happening around us. Another new trend among consumers is that they are extremely careful about whom they will give their trust, meaning they want to give their trust to companies that make efforts to preserve the environment and combat climate change – emphasizes Krog.
The most sought-after brand at Néstle is still Nescafé, says Krog, declared the most sustainable coffee in the world, and after it, the brand Garden Gourmet, a plant-based assortment, has the highest growth in demand.
Response to Inflation
After the pandemic, the biggest challenges for HoReCa and the FMCG sector are certainly inflation, which has brought many caterers to their knees. As Medak says, suppliers have increased the prices of some of their products, such as beef, by up to 40 percent, and the cost of energy, which once accounted for three to four percent in restaurants, is now 10 percent. Rougemarin has raised prices in line with the inflation percentage, but has lost the same percentage of guests. His fate is shared by other restaurants that have passed on the costs of increases to their menus. Suppliers, on the other hand, who, unlike restaurants, have greater financial capacities, are trying to mitigate that blow somehow. Thus, at Franck last year, despite raw coffee prices being double in 2022 and reaching the highest level in the last ten years or more, they passed on only part of those increases to consumers, compensating the rest through business rationalization and internal resources.
– We consciously reduced profit margins and thus ensured a stable position in the market and allowed the continued recovery of the HoReCa channel. At the same time, we controlled the increase in sales prices, which did not cover the rise in input prices, accompanied by equal investments in the HoReCa channel, in sales points through marketing, and investments in catering equipment, primarily coffee machines, whose prices have also risen significantly. Inflationary pressures continue in 2023, and we continue to work so that only the necessary part of the increase in input prices is embedded in our sales prices to ensure the normal flow of production, employment, and other operational and investment activities – concludes Iviček.
In response to the inflationary challenges faced by the HoReCa sector, Metro has devised the Profi price concept, under which stable and lower prices are set for those products that professional buyers need in larger quantities or packaging. At the same time, all parties are turning to digitalization, both in the ordering process and in the digital exchange of invoices, as well as in measuring customer experience. This process is going somewhat slower in Croatia because small buyers and businesses dominate the HoReCa channel, and they are not yet ready for digitalization.
